Boeing CEO Dave Calhoun faces grilling at Senate hearing

Summary

In a heated exchange, a senator confronts the CEO of Boeing over his $32.8 million salary, a 45% increase, questioning the link between his compensation and the company's transparency and safety record. The senator highlights ongoing investigations, whistleblower allegations of safety and quality compromises, and the lack of profit or stock price growth under the CEO's tenure. The CEO defends his leadership, but the senator asserts that the company's focus on shareholder value has come at the expense of safety, quality, and worker well-being.

Takeaways

• 💼 The CEO of Boeing received a salary of 32.8 million dollars this year, a 45% increase from the previous year.
• 🔍 The company is under scrutiny for various issues including falsifying 787 inspection records, a criminal investigation related to an Alaska Airlines flight, and previous DOJ investigation for criminal conspiracy to defraud the FAA.
• 💬 The Senator questions the CEO's compensation in light of these transparency and safety issues.
• 🛫 There are allegations of safety compromises, such as using dish soap and a wet cheesecloth to lubricate and clean a door seal, and checking another with a hotel room key card.
• 🚫 The FAA has noted that Boeing has not fully implemented the recommended safety steps from 2019 and 2020 following the Max crash.
• 📉 Despite the CEO's high compensation, Boeing's stock price has not increased during his tenure, and there have been no stock buybacks or profit increases.
• 🔨 Whistleblowers have reported that Boeing is cutting corners on quality and safety, with fewer inspectors and safety inspections, and that raising concerns leads to retaliation and threats.
• 🏆 The CEO defends the company's actions and insists on their focus on safety and quality, despite the allegations and evidence presented.
• 🤝 The CEO expresses pride in Boeing's safety record and the actions taken, and does not see the company as the Senator described.
• 🤔 The Senator challenges the CEO's priorities, suggesting a focus on shareholder value at the expense of safety, quality, and worker well-being.
• 🙅‍♂️ The CEO is asked why he has not resigned given the issues, to which he responds that he is committed to the job and proud of Boeing's people.

Q & A

What is the annual compensation of the Boeing CEO mentioned in the transcript?

The annual compensation of the Boeing CEO mentioned in the transcript is 32.8 million dollars.

What percentage increase in compensation does the CEO have compared to the previous year?

The CEO has a 45% increase in compensation compared to the previous year.

What is the role of the CEO according to the transcript?

According to the transcript, the CEO's role is to run the Boeing Company.

What issues are raised regarding transparency in the Boeing Company?

Issues raised regarding transparency include the company being under investigation for falsifying 787 inspection records, under criminal investigation for the Alaska Airlines flight, and previously investigated by the DOJ for criminal conspiracy to defraud the FAA.

How does the CEO respond to the concerns about safety in the production process?

The CEO responds by stating that the relationship with the subcontractor in question has been reviewed by the FAA and Boeing, and he is intent on acquiring the company to prevent such issues.

What steps has Boeing reportedly not implemented according to the FAA?

Boeing has reportedly not implemented the recommended steps from 2019 and 2020 after the Max crash, which were related to safety procedures.

What is the CEO's stance on the allegations of cutting corners on quality and safety?

The CEO denies the allegations, stating that they have increased the number of quality inspectors and that they have taken action on all issues raised by whistleblowers.

How has the Boeing stock price performed during the CEO's tenure?

The transcript indicates that the Boeing stock price has not increased during the CEO's tenure.

What is the CEO's response to the lack of profit and stock price increase?

The CEO does not provide a direct response to the lack of profit and stock price increase in the transcript.

What allegations have been made by whistleblowers according to the transcript?

Whistleblowers have alleged that Boeing is cutting corners on quality and safety, eliminating safety inspections, retaliating against those who raise concerns, and threatening employees.

How does the CEO justify his high compensation despite the issues raised?

The CEO justifies his compensation by stating that he is sticking through the challenges, is proud of the safety record, and is committed to the company and its people.

Outlines

00:00

💼 Executive Compensation and Accountability

The first paragraph of the video script features a heated exchange between a senator and the CEO of Boeing. The senator confronts the CEO about his substantial compensation of 32.8 million dollars, which is a 45% increase from the previous year, questioning the correlation between his pay and the company's performance. The senator highlights ongoing investigations into Boeing for falsifying records and safety issues, suggesting that the CEO's pay does not reflect the company's commitment to transparency, safety, or quality. The senator also raises concerns about whistleblower allegations of safety and quality corners being cut, and the lack of increase in stock price or profits during the CEO's tenure. The CEO defends his position, stating that he is focused on safety and quality, and that the company has increased the number of quality inspectors.

05:01

🛫 Boeing's Safety and Ethical Challenges

In the second paragraph, the senator continues to press the CEO on Boeing's safety and ethical challenges. The senator references specific incidents such as the 737 Max crashes and parts falling off aircraft, and criticizes the CEO for not recognizing the gravity of the situation. The senator also addresses the whistleblowers' testimonies about being ignored, retaliated against, and even threatened for raising concerns about safety and quality. The CEO maintains that he is proud of the company's safety record and the actions taken, but the senator expresses disbelief and challenges the CEO's pride in the company's current state, suggesting that the CEO's compensation is not aligned with the company's performance or the well-being of its employees and customers.

Keywords

💡Transparency

Transparency refers to the quality of being open, communicative, and accountable, especially in the context of business practices. In the video, the concept of transparency is questioned as the Senator highlights the company's alleged lack of it, citing issues such as falsified records and criminal investigations, which suggest a lack of openness and honesty in the company's operations.

💡Compensation

Compensation in this context is the remuneration received by the executive for his role in running the company. The video emphasizes a disconnect between the executive's high compensation of $33 million and the perceived lack of safety and quality in the company's products, suggesting that the executive's pay does not align with the company's performance or values.

💡Safety

Safety is a critical aspect of any company's operations, especially in industries like aviation. The script discusses safety in relation to the company's practices, where the Senator points out incidents and allegations that suggest the company may not be prioritizing safety, such as the use of inappropriate materials for aircraft parts and the lack of implementation of recommended safety measures.

💡Quality

Quality is the standard of something measured against other things of a similar kind, or the degree of excellence of a product or service. The video raises concerns about the company's commitment to quality, with references to whistleblowers alleging that the company is cutting corners and reducing the number of quality inspections, which could compromise the integrity of their products.

💡Whistleblowers

Whistleblowers are individuals who report misconduct, often within their organization. In the video, whistleblowers are mentioned as having come forward to report on the company's practices, indicating a culture of fear and retaliation, which suggests a lack of ethical behavior and accountability within the company.

💡Profit

Profit is the excess of revenues over the costs in a business. The script contrasts the executive's high compensation with the company's lack of profits, suggesting a misalignment between the executive's personal gain and the company's financial performance, and implying that the focus on shareholder value may be detrimental to the company's long-term health.

💡Stock Price

The stock price is the cost at which shares in a company are bought and sold. The video mentions that the company's stock price has not increased during the executive's tenure, indicating that the market may not value the company's performance or future prospects, despite the executive's high compensation.

💡Cutting Corners

Cutting corners is an idiom that means doing something in a quicker or easier way, often at the expense of quality. The Senator accuses the company of cutting corners on safety and quality, implying that they are taking shortcuts that could be dangerous or unethical in order to save time or money.

💡Investigation

An investigation is a formal inquiry into the details of a matter. The script refers to multiple investigations into the company's practices, including criminal investigations and inquiries by regulatory bodies, which suggest serious concerns about the company's conduct and compliance with regulations.

💡FAA

FAA stands for the Federal Aviation Administration, which is the regulatory body for civil aviation in the United States. The video mentions the FAA in the context of the company's interactions with it, including the company's alleged failure to implement the FAA's recommended safety measures and the FAA's role in reviewing the company's practices.

💡Strip Mining

Strip mining is a type of surface mining in which the soil and vegetation are stripped away to access the underlying minerals. In the video, the term is used metaphorically to describe the executive's approach to running the company, suggesting that he is extracting value without regard for the long-term consequences, similar to how strip mining can deplete natural resources.

Highlights

Senator questions CEO's $32.8 million compensation, a 45% increase from last year despite ongoing issues.

CEO admits being paid for transparency, but Boeing faces multiple investigations for falsifying records and safety violations.

Senator points out lack of transparency and safety, citing whistleblower allegations of Boeing cutting corners and retaliating against employees who raise concerns.

CEO defends company's safety record but Senator highlights two 737 Max crashes and other safety incidents during CEO's tenure.

Senator accuses CEO of prioritizing shareholder value and profit over safety, quality, and transparency.

CEO denies allegations of cutting safety procedures and eliminating quality inspections, despite whistleblower testimony.

Senator questions CEO's $33 million compensation package when Boeing's stock price and profits have not increased.

CEO admits not watching stock price and denies any stock buybacks during his tenure.

Senator criticizes CEO for not resigning despite the company's safety and quality issues under his leadership.

CEO insists he is proud of Boeing's safety record and the actions taken, despite Senator's concerns.

Senator challenges CEO's pride in the company, citing engineers' claims of being ignored, retaliated against, and threatened.

CEO denies recognizing the negative portrayal of Boeing, insisting the company operates differently.

Senator contrasts CEO's compensation with the company's performance and the risks faced by employees and whistleblowers.

Senator asks if CEO thinks his priorities are misplaced and if it's time to focus on quality, worker welfare, and the company's legacy.

CEO stands by his statements and assures Senator that the company does not operate in the way described by whistleblowers.

Senator expresses disbelief at CEO's response, highlighting the stark reality of the company's current state under his leadership.

CEO maintains his position and expresses pride in the job, despite the Senator's criticisms and concerns raised by whistleblowers.

Transcripts

what is it that that you get paid

currently Senator that's uh well

disclosed in in our proxy documents uh

in each of the years that I've been

employed yeah but what is it it's a big

number sir well let me help you out it's

32.8 million this year does that sound

right yes it does that's a 45% increase

over last year does that sound right yes

it does what is it you get paid to do

exactly I get paid to run the Boeing

Company yeah so just help me understand

that I mean do you get paid for

transparency is that is that part of is

that one of the metrics for your income

I think the board counts on me for

transparency really because you're under

investigation for falsifying 787

inspection records the Boeing's under

criminal investigation for the Alaska

Airlines flight you were investigated by

go by doj for criminal conspiracy to

defraud the FAA this is all in your

tenure this doesn't sound like a lot of

transparency to me

um what about uh safety is that a

component of your salary it sure is

Senator you know have you seen the

reports that the subcontractor that you

use to make that door piece that fell

out of the sky that when the FAA went

and toured the facility they found one

door seal being lubricated with Dawn

liquid dish soap and cleaned with a wet

cheesecloth and another was was being

checked with a hotel room key card does

that sound like safety to you Senator I

I think our relationship with that

particular supplier has been well

documented reviewed by the FAA and most

certainly us and I'm very intent on

acquiring that company so that none of

that ever happens you know the FAA also

says that Boeing still has not

implemented the recommended steps back

from 2019 and 2020 after the max crash

is you you you still have not taken the

appropriate safety procedures or

implemented what they recommended I mean

how if safety is a component of your $33

million compensation package I mean how

can you possibly qualify for any of this

what what about quality is quality part

of your compensation

package Senator I uh I meet with the

FAA pretty regularly uh they don't hold

anything back and I'm not aware of

anything that has been cited with

respect to those accidents that we

haven't uh taken action on really

because we've had whistleblowers you

said You' listen to whistleblower

testimony we've had multiple

whistleblowers come before this

committee and allege that Boeing is

cutting every possible corner on quality

and safety not just in the past but now

they've alleged that you've eliminated

safety inspections that there are fewer

in quality and there are fewer

inspectors doing quality inspections out

there they've alleged that when they

raised quality issues and concerns they

were reassigned they were retaliated

against they were physically threatened

that doesn't sound like attention to

Quality to me and yet you're getting

paid $33 million a year it's

extraordinary Senator I

I we have increased our quality

inspectors significantly how much has

your stock price increased while you've

been at Boeing it hasn't and I don't

watch it much have you done any stuck

BuyBacks while you've been at boing uh

not in my job no how about your profits

have your profits increased at all well

you haven't had any profits sir I'm

sorry I have not had any profits yeah

you know I I think the truth is Mr coun

you're not focused on safety you're not

focused on quality you're not focused on

transparency all of this is in the

record but I think actually you're

focused on exactly what you were hired

to do which is that you're cutting

Corners you are eliminating safety

procedures you are sing it to your

employees you are cutting back jobs

because you're trying to squeeze every

piece of profit you can out of this

country you're this company you're strip

mining it you're strip mining Boeing was

one of the greatest American companies

ever it has employed thousands of people

in my state and you are strip mining it

for profit shareholder value and you're

being rewarded for it you got a huge

raise a huge

increase so it's working out great for

you for the American people they're in

danger for your workers they're in Peril

for your whistleblowers they literally

fear for their lives but you're getting

compensated like never before don't you

think maybe your priorities are are

misplaced here I mean don't you think

maybe it's time to get back to focusing

on making quality ples and paying your

workers well and taking care of the

little guys who got you to where you

are that's not a rhetorical question

Senator uh I don't

recognize any of the Boe you described

really and I want to sure you don't

recognize the Boeing that has airplanes

falling out of the sky that has had two

Maxes crash that has had pieces of doors

fall out of the sky that have had

whistleblowers come before they've sat

right where you have sat and told us

these are your employees who have told

us that when they these are the

engineers by the way are you an engineer

I'm not yeah they are and they have said

that they're not listened to that

they're retaliated against that they're

threatened that's the reality of Boeing

today that's your company that you have

created now I don't recognize it either

from the company it used to be decades

ago but under your leadership that's

what Boeing is and you're being rewarded

for it handsomely handsomely don't you

think there's something wrong with

that why haven't you resigned yeah

Senator I uh I stand by what I said and

I want to assure the great employees in

in your state that um that is not the

way we operate the company and it never

will be if you would like my chief

engineer to talk about what he sees and

want to hear from you CU what I hear

from you is a lot of this team does that

and that team does that and I listen to

the whistleblowers but I don't meet with

them and I've heard about all this stuff

that you Congress have have medom asked

for because the public wants to see it

gosh darn him but you actually haven't

supervised any of it I've heard that

it's a lot of it's this it's that it's

this it's that but meanwhile you're

getting paid a heck of a lot of money

it's unbelievable if anybody's coming

out of this deal good it's you why

haven't you

resigned Senator I'm I'm sticking this

through I'm proud proud of having taken

the job I'm proud of our safety record

and I

am of our Boeing people you're proud of

this safety record I am proud of every

action we have taken every action you've

taken yes sir wow wow there's some news

for you